Thursday, August 31, 2006

Calls of Note Part 4

- Ryan Beck & Co comments on Analogic Corp (NASDAQ:ALOG) saying that since the ban on carrying liquids aboard aircraft was put into effect, the Transportation Security Administration (TSA) has observed a 20% increase in the number of checked bags on flights originating in the United States. Separately, the test of the ALOG's COBRA scanner for carry-on bags has been extended.

Opportunities for ALOG are increasing, in ´firm's view, as some bottlenecks have been noted at domestic airports due to the increased volume of checked bags. They think this puts pressure on TSA to accelerate the already planned upgrade of systems currently installed as well as to acquire additional systems to improve the ability to detect explosives and increase screening speed. Furthermore, new technology like ALOG's COBRA could enable rapid screening of carry-on bags and certification could result in TSA purchases of the device earlier than they anticipate in our financial forecasts.

ALOG shares (which reflect $18.50+ of cash per share) are currently valued at an EV/F07E EBITDA multiple of about 8.5x.

Notablecalls: Not actionable but good to know category.

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